The House Mandela Built

Intent on tapping into the multibillion-dollar global wine business, the eldest daughter and granddaughter of former South African president and Nobel Prize winner Nelson Mandela earlier this year launched a U.S. line of indigenous South African wines under the patriarchal family name — House of Mandela — at an exclusive wine-tasting event in New York.

Makaziwe Mandela and her daughter, Tukwini, greeted more than 40 people at a midtown Manhattan office in late February. An eclectic mix of wines from the rustic vineyards of South Africa, along with an array of South African cuisine samplers, highlighted the evening. The Mandelas recounted how their dream of entrepreneurship not only came to fruition, but the dream also is thriving despite tough and tenuous economic times.

“I knew very little about the wine industry when I started the business back in 2010,” Makaziwe said in an interview with The Network Journal. “I researched and learned as much as I could about the wine business.” Inspired, at least in part, by a profound piece of wisdom from her father decades earlier, Makaziwe moved ahead with starting the business. “My father said, ‘If you don’t drink wine, the world won’t accept you,’” she said.

Nothing to whine aboutAs it turns out, Nelson Mandela’s prophetic prediction to his eldest daughter was right on point. The wine-making and distribution industry is big business nationally and globally. According to eWinery Solutions, the top provider of direct-to-consumer software and systems for the wine industry, there are more than 8,000 wineries, 100,000 wine brands, and 100,000 wine retailers in the United States. Add the European, Latin American, Asia-Pacific, and, of course, Africa, and the wine business is as pervasive and prodigious as it is profitable.

When apartheid ended in South Africa in 1994, the country had the chance to revamp the wine industry, which, up until that point, was minimal. At one time, for example, South Africa produced fewer than 50 million liters of wine. Now, nearly 20 years after the end of apartheid, the country produces as much as 500 million to 600 million liters of the fermented grape juice annually, accounting for about 3 percent of the world’s wine production. South Africa exports more than half of its production and, as of 2010, is ranked the ninth-largest producer of wine in the world, according to Silicon Valley Bank’s current annual State of the Wine Industry Report.

The bank, considered the leading provider of financial services to the wine industry, annually publishes a comprehensive study on trends, statistics and special events in the wine industry. The most recent report, released in January, predicts that the industry will continue to grow slowly but steadily. Sales of fine wine will increase between 4 percent to 8 percent in 2013; mergers and acquisitions of wineries and vineyards will continue through the year; and both gross and net profits of wineries will be hampered by a sharp increase in grape prices, the report says.

“It’s another good-news-bad-news year for fine wine,” Rob McMillan, founder of Silicon Valley Bank’s Wine Division, said in the report. “Economic uncertainty, lack of economic leadership worldwide, and aging baby boomers and a heavy 2012 harvest will make profitability tough for the first part of the year.” However, the second half of 2013 should see improvement and solid growth for the industry, he said. “Direct-to-consumer sales will continue as the largest growth channel for most wineries,” he said.

U.S. consumers have been slow to embrace wines from South Africa. Industry statistics show that sales of South African wine account for just about 1 percent of total wine sales in the United States. In a bid to change that, the Mandelas and some of their strategic partners are turning to niche marketing and branding strategies.

“Wine has a rich history in our country and we want to share some of that history with the world,” said Tukwini Mandela, the House of Mandela’s marketing director. She is working with Selena Cuffe, president of Heritage Link Brands, the California-based importer of House of Mandela wines and one of the largest distributors of wines produced by African vintners.

A former executive with United Airlines and Proctor & Gamble, Cuffe says she first approached the Mandelas a few years ago about marketing their wine in the U.S. after she learned how essential and lucrative the wine industry was in South Africa. “The industry is valued at three billion dollars and employs hundreds of thousands of South Africans, but less than two percent of the exported wines were made by Black South Africans,” says Cuffe, “I knew there was definitely a market for South African wine in America.”

It took several phone calls, emails and discussions, but Cuffe eventually convinced the Mandelas to establish a U.S. presence. The House of Mandela in America was born.

The product The House of Mandela offers two tiers of wines for purchase: the Thembu line, and the more expensive Royal Reserve line with a price range of $30 to $50. Both lines feature red and white wines, as well as sparkling wines. “A portion of the profits from the sale of the wines will be donated to charities in South Africa that work toward the social and economic empowerment of Black South Africans,” says Tukwini.

Her famous 94-year-old grandfather is not personally involved in the project, she says, but he has pledged his support to the business that bears his name. “We are committed to preserving his legacy and committed to the overall empowerment of all Black South Africans,” she said.